Electrical Monitor
 

Electrical equipment industry continues to plunge

Em News BureauFriday, April 19, 2013, 11:09 Hrs  [IST]

The fall in the Indian electrical equipment industry continued unabated in the third quarter of FY13, according to statistics released by apex industry body IEEMA. The industry contracted by 10.5 per cent Q3 of FY13, following a 3.9 per cent decline in Q2 and a 1.8 fall in Q1 of FY13.

Almost all sectors decelerated during Q3 FY13. Only transformers and capacitors were able to arrest their declining trend to some extent. Power cables and energy meters sectors were severely hit during Q3 FY13, the study pointed out.

Commenting on the debacle, IEEMA President J. G. Kulkarni said “The situation of the T&D sector is turning extremely grim and the government needs to tackle the situation on a war-footing, failing which it will become difficult for many players to survive in the business. The domestic electrical equipment industry is reeling under the twin onslaught of the slowdown in the country’s power sector, which has depressed domestic demand, and the rapidly escalating imports of electrical equipment. Both of which have resulted in gross under-utilization of the manufacturing capacity for electrical equipment in the country.”

The transformer industry suffered a negative growth of 9.6 per cent in Q3 against the negative growth of 16.1 per cent in Q2 of FY13. The switchgear industry, which registered a decline of 3.9 per cent in Q2 FY13 managed to recover slightly by arresting the negative growth to 3.6 per cent in Q3 FY13.

Select low-voltage switchgear products like MCBs, motor starters and house wiring cables are showing some resilience due to orders from the realty sector, the release noted. Helping domestic output has been exports growth as was witnessed in products like transmission towers, energy meters, LV control panel, MCCs, etc. Exports growth of more than 40 per cent in terms of value has partially offset the downtrend in the industry, the study observed.

Although the overall import growth in the electrical equipment industry was about 16 per cent, sectors like EHV transformers, LT switchgear, motors, generators and insulators have faced alarming imports, mostly from China and South Korea.

The delays in project/order finalization due to precarious financial health of state distribution utilities, coupled with uncertainty and credit crunch and high borrowing costs for private sector buyers, has led to this grim situation. Adding to this is the piling up of equipment stock due to non acceptance of the ordered material.

All this has put tremendous pressure on the cash flow position of equipment manufacturers that are already under severe burden of under-utilization of capacities, escalating imports, lack of testing & calibrating facilities in India, lack of skilled manpower, non-uniform and outdated procurement practices of utilities, etc, the study pointed out.

Performance of Electrical Equipment Industry
(Apr-Dec: 2012 over 2011)
Product Weight (%) y-o-y % chg
Rotating Machines Industry 10.0 -1.9
  LT Motors 4.3 -6.4
  HT Motors 2.5 -11.4
  Alternators 1.5 17.8
  FHP Motors 1.7 6.4
Switchgear Industry 15.1 -1.3
  LV Switchgear 9.4 3.2
   Power Contactors 2.3 -3.0
   LT Circuit Breakers 3.9 4.2
   MCB 2.6 8.3
   S/F & F/S Units 0.6 -1.7
HT Circuit Breakers 5.7 -8.6
  Cable Industry 27.5 -21.1
   Power Cables: PVC 19.8 -17.3
   Control/Special Purpose Cables 7.7 -30.7
Transformer Industry 19.3 -11.7
   Power Transformers 9.2 -9.2
   Distribution Transformers 10.1 -14.1
Capacitor Industry 0.8 -30.4
  HT Capacitors 0.3 -24.0
  LT Capacitors 0.5 -34.2
Energy Meters 3.9 -2.8
  Transmission Line Industry 23.4 11.3
   Transmission Towers 13.1 1.7
   Conductors 10.3 23.5
Total 100.0 -6.1
Source: IEEMA

 
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